Nvidia graphics processing units
For almost two years, NVIDIA GPUs were some of the most overpriced pieces of hardware on the market. Gamers couldn’t buy them, creators couldn’t afford them, and retailers were sold out everywhere. Then, almost overnight, prices collapsed. RTX cards that once sold for double their MSRP suddenly became affordable again.
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| NVIDIA GPUs |
The turning point was a single event: the end of Ethereum GPU mining, also known as The Merge. When Ethereum switched from Proof-of-Work to Proof-of-Stake, mining ended instantly, and the entire GPU economy changed with it.
What does Nvidia exactly do?
What If I Invested $10,000 in NVIDIA 10 Years Ago?
Why GPUs Were So Expensive Before
Before 2022, NVIDIA graphics cards were already popular among gamers for their performance, but prices were mostly stable. Everything changed with the rise of cryptocurrency mining, especially Ethereum.
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| Why GPUs Were So Expensive Before |
Miners needed powerful GPUs to solve complex algorithms, and NVIDIA cards were among the most efficient for this purpose.
The sudden surge in demand from crypto miners caused two main problems:
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Scarcity: The number of high-performance GPUs available in stores dropped sharply because miners bought them in bulk.
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Price Inflation: With limited supply and high demand, retailers raised prices, and secondary markets (like eBay) saw GPU prices skyrocketing—sometimes 2–3 times their original MSRP.
Gamers, who were the main customers for NVIDIA cards, found it almost impossible to buy a new GPU at a reasonable price. This situation lasted for several years, making GPUs one of the hottest and most expensive computer components.
By 2023–2024, the crypto market cooled down, Ethereum switched to proof-of-stake (reducing mining demand), and GPU prices began to normalize but the effects of that boom are still remembered by many.
Why GPU Prices Continued Falling in 2023–2024
After the cryptocurrency boom, GPU prices didn’t immediately return to normal—they continued to fluctuate and gradually fall throughout 2023–2024. Several factors contributed to this trend:
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Ethereum’s Shift to Proof-of-Stake:
In September 2022, Ethereum switched from proof-of-work (PoW) to proof-of-stake (PoS), drastically reducing the need for mining GPUs. With fewer miners buying graphics cards, demand dropped significantly. -
Oversupply from Manufacturers:
During the boom, NVIDIA and other GPU makers ramped up production to meet mining demand. When mining slowed, the market was flooded with new and leftover GPUs, pushing prices down. -
Gaming Market Normalization:
Gamers, who had previously been priced out, could finally purchase GPUs at reasonable prices. This increased supply for regular consumers but put downward pressure on inflated resale prices. -
Competition from AMD and New NVIDIA Models:
The release of new GPU series from NVIDIA (like RTX 40-series) and AMD introduced more options at various price points, forcing older GPUs to drop in value. -
End of Global Supply Chain Issues:
By 2023, semiconductor production stabilized, logistics improved, and chip shortages eased, allowing a smoother flow of GPUs into the market.
Why is GPU mining not profitable anymore?
GPU mining, which once made miners quick profits, has largely lost its appeal. Several factors explain why mining with graphics cards is no longer profitable for most people:
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Cryptocurrency Price Decline:
Many major cryptocurrencies, including Ethereum, have seen significant price drops compared to their all-time highs. Lower coin prices mean lower rewards for miners, reducing profitability. -
Ethereum’s Move to Proof-of-Stake (PoS):
Ethereum, one of the most profitable coins to mine, switched from proof-of-work to proof-of-stake in 2022. This transition eliminated the need for GPUs in mining Ethereum, cutting a huge portion of the market for miners. -
High Electricity Costs:
Mining consumes a lot of electricity. With decreased rewards and still-high power consumption, miners often spend more on electricity than they earn from mining. -
Increased Competition and Network Difficulty:
As more miners join a network, the mining difficulty increases, meaning it takes more computational power (and more electricity) to earn the same amount of cryptocurrency. -
Better Alternatives Exist:
ASIC miners and specialized mining hardware have become more efficient than general-purpose GPUs. This makes GPUs less competitive and less profitable for serious mining operations.
Unless cryptocurrency prices surge dramatically, GPU mining is no longer a profitable venture for most individuals. Gamers and investors benefit from the resulting drop in GPU prices, but miners face tough decisions.
Why did Ethereum stop mining?
Is Mining Harmful to GPUs?
Intensive mining can wear out GPUs faster than normal gaming use. Mining runs graphics cards at full power 24/7, generating high heat and stress on components like VRAM, fans, and the power delivery system. Over time, this can reduce lifespan, cause overheating, or even damage the card if cooling is insufficient. Proper cooling and maintenance can help, but mining always increases hardware wear.